WebMD’s CEO Redmond Steps Down After 1 Year in PostDrew Armstrong
WebMD Health Corp. Chief Executive Officer Cavan Redmond stepped down after about a year on the job as the consumer health-information website raised its sales forecast for 2013.
David Schlanger, WebMD’s senior vice president for strategic and corporate development, will take over on an interim basis in the top post as the board seeks a permanent replacement, the New York-based company said yesterday in a statement. The company also raised its revenue projection to $450 million to $470 million from $430 million to $455 million, based on an improved outlook for its advertising business from drug companies.
WebMD generates most of its revenue from ads and sponsorships, and said in July that business would probably suffer as drugmakers face patent expirations and delayed products. In December the online provider of health information said it would fire 250 workers, about 14 percent of its workforce, citing the decline in drug ads.
“The change announced today will best position us to build on the momentum that our senior management team has created to date,” Chairman Martin Wygod said in the statement. “We will accelerate the development and implementation of strategies to diversify our revenue base and capture opportunities arising form the rapidly changing health-care landscape.”
WebMD gained 10 percent to $27.94 at the close in New York, the biggest single-day increase since Feb. 22. The shares have risen 27 percent in the last 12 months.
Redmond, the former head of animal health, consumer health-care and corporate strategy for Pfizer Inc., was hired about a year ago as CEO. In January 2012, WebMD said it broke off talks with potential buyers because the offers were less than the company’s value. Schlanger has been with WebMD and its predecessors for 18 years and was responsible for acquisitions and deals operations.
The company yesterday also reported its first-quarter net loss narrowed to $1.54 million, or 3 cents a share, from $7.78 million, or 14 cents, a year earlier. Analysts had projected a loss of 15 cents, according to the average of five estimates compiled by Bloomberg. Sales were $113 million, compared with analysts’ estimates of $107 million.